The availability of stern/progenitor cells offers ways to develop novel therapies for type 1 diabetes mellitus, which is characterized by depletion of pancreatic beta islet cells. Although transplantation of pancreatic islets ameliorates diabetes mellitus, the availability of human pancreas is quite limited. Our general hypothesis is that induction of pancreatic beta cell function in stem/progenitor cells will provide an unlimited supply of cells for treating diabetes. Recent studies showed that insulin can be expressed in pluripotential murine embryonic stem (ES) cells. Similarly, progenitor cells isolated from the rodent liver can be differentiated along pancreatic islet cell lineages with insulin expression, which is of considerable interest because both liver and pancreas arise from the primitive foregut. Regulation of insulin expression in the pancreas and liver is directed by master transcriptional switches, such as the pancreatic duodenal homeobox gene-1 (Pdx1). We recently isolated unique populations of epithelial progenitor cells from the fetal human liver with capacity for extensive replication and multilineage gene expression. These cells are amenable to genetic manipulation, with Pdx1 expression, leading to insulin expression. This proposal aims 1) to further define mechanisms of Pdx 1-induced insulin expression in human liver progenitor cells with a variety of in vitro manipulations, 2) to analyze the potential of Pdx 1-containing human liver progenitor cells for correcting diabetes mellitus in immunodeficient animals, and 3) to determine activation of unique genetic networks in stem/progenitor cells following Pdx 1 expression and acquisition of pancreatic beta cell function. The proposed series of integrated experiments will advance our knowledge of stem cell biology and offer ways to accomplish the overall missions of this program. The studies will benefit from synergies among investigators with expertise in stem cell biology and molecular hepatology, molecular biology of the pancreas, and pancreatic beta-cell physiology.